Press Releases

NOVELLUS SYSTEMS ANNOUNCES RECORD ORDERS, REVENUES AND EARNINGS FOR THE SECOND QUARTER

San Jose, Calif. -- Jul. 17, 2000 -- Novellus Systems, Inc. (Nasdaq NM: NVLS) today reported record net sales and results of operations for its second quarter ended July 1, 2000. Net sales for the quarter were $326.0 million, up 19 percent from $274.1 million in the first quarter of 2000 and up 149 percent from second quarter 1999 net sales of $130.9 million. Net income for the second quarter of 2000 was $75.7 million or $0.56 per share, up 32 percent from $57.5 million or $0.45 per share, for the first quarter of 2000 and up 510 percent as compared to net income posted in the second quarter of 1999 of $12.4 million and $0.10 per share. The per share amounts are stated on a fully diluted basis.

Record bookings for the quarter once again generated a book to bill ratio which was significantly above 1:1 for the quarter.

During the quarter, Novellus completed a public offering of just over nine million shares of its common stock, resulting in net proceeds to the Company of $526.3 million. Internal cash generation in the quarter contributed an additional $95 million to the quarter end cash balance of $1.071 billion.

Richard Hill, chairman and chief executive officer said: "This has been an eventful quarter for Novellus, with the addition of our company to the S&P 500, preparing for the launch of a new and revolutionary product, and another record quarter driven by robust capital spending by our customers for expanded capacity and advanced technology."

Hill continued, "Novellus' new product momentum continued with the recent unveiling of our complete suite of 300mm products at the Semicon West trade show. VECTOR™, a new 300mm plasma enhanced chemical vapor deposition (PECVD) system, is designed to deliver the full range of damascene dielectric films, and is extendable down to the 0.10 micron node, while reducing our customers' production costs. INOVA™ xT, a 300mm physical vapor deposition (PVD) machine, combines our proven hollow cathode magnetron (HCM™) technology with a new innovative hardware design. At 100 wafers per hour, the INOVA™ xT delivers twice the throughput of any existing PVD system on the market. Significant enhancements to our Sabre xT electrofill system were announced as Novellus continues to develop innovative product features to strengthen its industry leading position. With these new products, Novellus is well positioned for the industry transition to copper dual damascene, 300mm wafers, and geometries down to the 0.10 micron node."

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements regarding (i) the Company’s positioning for the semiconductor industry transition to copper dual damascene, 300mm wafers, and 0.10 micron geometries, reduction of customer production costs, the Company's continuing development of features to strengthen its leading position, as well as other matters discussed in the news release that are not purely historical data, are forward-looking statements. The forward-looking statements involve risks and uncertainties including, but not limited to, the possibility that the VECTOR™ system does not meet customer and product design specifications and the inability of the Company's product development efforts to continue its position as an industry leader in deposition technologies, and other risks indicated in filings with the Securities and Exchange Commission (SEC). Actual results could differ materially. Novellus assumes no obligation to update this information. For more details, please refer to Novellus' SEC filings, including its most recent Annual Report on Form 10-K for the year ended December 31, 1999 and our quarterly reports on Form 10-Q for the quarter ended March 31, 2000.

Novellus Systems, Inc., an S&P 500 company, manufactures, markets, and services advanced automated wafer fabrication systems for the deposition of thin films. Novellus deposition systems are designed for high-volume production of advanced, leading-edge semiconductors at the lowest overall cost. The Company's stock trades on the Nasdaq Stock Market's National Market under the symbol "NVLS". Additional information about the company is available on the Novellus Systems home page on the World Wide Web, located at http://www.novellus.com.